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February 10, 2007 / Mridul

Dump Iran, Get Gas From Russia

The energy thirsty Indian economy is looking for sources through which it could boost its economic growth into double figures. One of these very important ‘sources’ is Iran. Well, here start the problems for India and their solutions might lead it to its oldest & closest ally, Russia.

India and China have grown into the fastest growing economies in the world and so have their hunger for oil & natural gas, which they want to further propel their economy into the league of the developed nations. Lately, China has been running behind the financially poor but rich in petroleum African nations with loans & infrastructure incentives to get hold of the precious commodity. India, on the other hand, is still considering the proposal of a gas pipeline from Iran through Pakistan which might quench its thirst for energy.

The decision on the pipeline is a difficult one for India. It desperately wants Iranian gas but at the same time it does not want to annoy the United States which recently got into a civilian nuclear energy deal. Both, Iran as well as the US are trying to put pressure on the Indian government and India, is now feeling the crunch. It has to pick one of the two as they have come out as the staunchest enemies.

If India falls short of acquiring the much needed Iranian gas, it is at the risk of losing out to China in the race to become the next superpower. And if it opts for the Iranian gas then it might end up losing the nuclear deal with the US. Both, Iran and America, are trying to take full advantage of this situation. Iran has given India no chance to do some bargaining with the gas pricing. US, on the other hand, want India to stand with it and stop Iran from becoming a nuclear power.

Well, there is a solution, Russia. Russia holds the world’s largest natural gas reserves and has always been a strong ally to India. ONGC, India’s largest public sector oil marketing company already has considerable stake in the gas projects in the Sakhalin. Russia, too, has been using gas as an instrument to dictate terms to weaker countries which are run by US-backed governments. So a strategic partnership between India & Russia, with energy being its center stone, is a scenario which will help both countries in achieving their strategic and economic goals.

Export of military equipment is a vital part of Russia’s economy and India is one of the largest buyers of Russian-made military gear. With India having a large defense budget, Russian-made military equipment easily fit into the picture.

The right thing for India would be to dump the Iranian gas pipeline and go for the more beneficial and convenient option of importing gas from Russia. The import of gas via tankers will prove economically more favorable, plus there won’t be any constant fear of sabotage of the pipeline in Pakistan.

Both Russia and India need each other and its time that they once replenish their friendship by helping each other releasing their strategic goals and ambitions.

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